Miami-based cruise liner Norwegian Cruise Line Holdings Ltd. (NCLH) reported its net income for the second quarter of 2016 at USD 145.2 million, compared to a net income of USD 158.5 million seen in the second quarter of 2015.
The company’s quarterly revenue increased by 9.3% from USD 1.08 billion to USD 1.18 billion in the respective periods.
During the first half of the year, the cruise company’s net income surged to USD 218.4 million from USD 137 million recorded in the first half of 2015, while the revenue also increased to USD 2.26 billion from USD 2 billion, respectively.
Norwegian Cruise Line said that the increases were primarily attributed to the addition of Norwegian Escape and Oceania Cruises’ Sirena to the fleet as well as improved pricing, slightly offset by four scheduled dry-docks in the period.
Adjusted net yield improved by 1.2% on a constant currency basis, mainly due to efficiencies in cost of sale.
“While successive geopolitical events dampened North American consumer demand primarily for our Mediterranean itineraries, our management team worked diligently to identify cost saving opportunities to partially mitigate these impacts,” said Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings.
“It was a challenging booking environment where we remained mindful of our go to market strategy to minimize discounting and maintain our hard-fought pricing gains, resulting in lower occupancy, which in turn lowered onboard revenue and overall net yield growth compared to our expectations earlier in the year,” he added.
As it experienced significant booking headwinds, Norwegian Cruise Line said it is revising the earnings expectations for the second half of the year, primarily as a result of continued weak demand from North American consumer for European sailings, the effect of a weaker British pound post the Brexit vote, an adjustment to earlier pricing expectations for Miami-based Caribbean itineraries, and the impact from maintaining pricing discipline to minimize discounting.
“With this revision to expectations, we are confident we will deliver strong earnings growth for full year 2016 and grow 2017 adjusted EPS in the range of 15% to 25%,” Del Rio said, adding that, as a result, the company no longer expects to achieve its previously stated target of USD 5 adjusted EPS in 2017.